Is Burning Man cashing in from their Smithsonian exposure, right before the big cash-out of the “Original Founders”?
Here is some of the coverage of No Spectators: The Art of Burning Man at the Smithsonian American Art Museum’s Renwick gallery:
The New York Times asked “Will the Spirit of Burning Man Art Survive in Museums?”
Recently, they announced a deal with Intel and Linden Labs, creators of Second Life – home of the Burn2 cyberspace regional Burn.
Will there be a Burning Man: IMAX 3D now?
It is great that big corporations like Intel are patrons of the arts. To whom does that patronage flow? Qui bono: who benefits? Burners?
The Smithsonisan exhibit, all the media attention around it, and now immersive HD multimedia experiences are creating a lot of value.
Where is that value going? It is going to the brand. Who owns the brand? A private company. Who are the directors of that company? Well, it does not appear to be who they told us the controllers were when we first exposed the existence of Decommodifcation, LLC.
There’s been a bit of discussion in our recent Rockstar Librarian post by trolls who think if you are going to write about Burning Man on your blog, you should be expected to pay for other peoples’ art projects from your own pocket, and you must never criticize the founders.
All of the founders made millions of dollars from the corporatization of Burning Man, and I don’t begrudge them that. I’ve never criticized them for that. They chose to sell it for the lowest possible value to the Burning Man project, which did have the effect of increasing the size of the tax breaks they all received for donating the Org to the 501(c)3 – an organization controlled by themselves, with public reporting requirements, which never pays tax. That’s just a fact. There’s no need to doxx the founders’ financial situations, this was all information publicly discussed on their web site and in the newspapers at the time.
Did they earn a lot of money previously to that transaction, that they needed a tax break to cover? We may never know, but A Balanced Perspective has provided evidence to support his analysis that the annual salaries suddenly leaped from about 2 million a year in 2009 to about 8 million a year in 2010, where it stayed for a few years before the transition was “complete”. Where did all that money go? The workers? It definitely did not go to the artists.
We exposed in Decommodification, Inc and Clarification of Decommodification that what really went on with Burning Man’s “transition to a non-profit” was not entirely altruistic. Less well publicized was the creation of a private company in 2010 called Decommodifcation, LLC that held all the actual value of Burning Man. There were various statements made by various founders around the time. Here’s what Larry said. First:
I will address two lingering perplexities. It has been asked if we intend to reveal the financial records of Black Rock City LLC. The answer is yes; that too will happen at about the same time as the Burning Man Project reveals its information—these two entities will then become a clean well-lighted suite of rooms thrown open for inspection. But I cannot guaranty that even this amount of disclosure will satisfy everyone. Even then, I suppose that some will look for skeletons in closets, or search for sliding walls that might conceal a dungeon.
This did not in fact happen. Black Rock LLC’s financial records are still secret. The new organization, The Burning Man Project, is required to disclose their IRS Form 990, which is a publicly available document. They revealed what they are required to by law, and very little more. They arranged a story in Philanthropy magazine that they then pointed to as “proof” that they became more transparent. See 2014 Afterburn Report: The Death of Transparency and A Balanced Perspective’s guest post Unlikely Leader in Transparency.
The public information reveals not so much a dungeon as a giant treasure chest. Enormous amounts of cash that are being kept in the coffers. The financial reports in prior years disclosed more to the community. And the reason they were public in the first place? Because the community makes Burning Man. We The People have a right to know, because our money creates the Org to deal with the cops and the road signs and the lighting of The Man. We want to be sure our money is well spent, and not wasted on international junkets to festivals by the year round staff. The new reporting format does not deliver this, at all. There appears to be absolutely zero oversight of these matters.
As A Balanced Perspective pointed out, in an interview with Scribe in the SF Bay Guardian at the time the transition was first announced in 2011 they mentioned a second payout:
Yet Harvey and the other board members, such as Michael Mikel and Marian Goodell, insist that the board plays an important role in shepherding the event and the culture that has grown up around it, which is why they plan on waiting three years to turn control of the event over to the new nonprofit, the Burning Man Project, and another three years after that until they liquidate their ownership of the name and associated trademarks and are paid for their value.
This certainly suggests a further payout is due, one based on the value of the trademarks (very high) rather than the operating business (quite low). Control of the event was handed over to the non-profit The three years mentioned coincides with the planned dissolution of Decommodification, LLC. Which should be now. I couldn’t find any mention of it at all in the 2017 Annual Report.
Back to Larry:
So let me make one last comment regarding Decommodification LLC, which is viewed by some as a sort of sinister outbuilding that is separate from both the event organization and the Burning Man Project. My fellow founders and I are the sole members of this entity whose chief property is the name “Burning Man”. This too will be transferred to the non-profit in three years time, unless the partners elect “not” to do so by a unanimous vote. This arrangement is designed to force our hand.
The Burning Man event organization has used this trademark power to protect our community’s culture from being exploited. We have done this very diligently over several years (it is a right of ownership that must exercised, or it will perish). Furthermore, we have not relied on licensing this intellectual property as a source of revenue. The reason for this 3-year interval is that even we do not invest blind faith in the new non-profit’s workings, and we want to be perfectly sure that it can be relied upon, in the face of temptations that arise within any organization when dealing with power or money, to pursue the policies that we have practiced.
Larry is saying that unless the partners vote unanimously to stop it, the intellectual property held by Decommodification LLC transfers to the Burning Man Project this year – presumably triggering a large payout. Who are the partners? The story at the time was that this was the “6 Founders” of Burning Man. Who is it today? According to Corporation Wiki, something different.
Without Larry (may he Rest in Peace), that leaves Marian and Harley as managing members, along with Crimson Rose and Director of Finance Doug Robertson who seems to have been engineering this corporate restructure since he joined in 2009. Will they vote to pass all the intellectual property back to the Burning Man Project? Or will they vote to keep it where it is, in a private company with no oversight that owns assets worth (at least) tens of millions of dollars that they completely control? We know that Decommodification LLC earns royalties from the Burning Man Project for the use of the trademarks. As best we can tell, it’s $75,000 per year. How much do museums pay? How much gets earned from documentaries, soundtracks, calendars, and other users of the brand? This information is a closely guarded secret.
We have already seen the legal resources of The Burning Man Project being employed to protect the value of the intellectual property owned by Decommodification, LLC.
Time flies. “It’s already been a few years, what’s a few more”? From the 2014 thread discussing the transition at Burning Man’s site; my opinions have not changed in the past 4 years:
A great comment along these lines from Dave:
One of the things mentioned at the time of the transition was the concept of a “Dead Man’s Switch”. Danger Ranger was rather proud of having inserted this:
The sole purpose of Decommodification LLC is to protect the Burning Man name and I’ve programmed it to automatically dissolve after its mission is completed. Larry has the last word on the Transition discussion. (But I am pleased to note that I am the one who programmed the deadman switch into Decommodification LLC.)
[Source: Danger Ranger Facebook post, 2014]
Sounds wonderful, doesn’t it? “Don’t worry about anything because I programmed it to automatically dissolve”. It is easy for these people to say things, but you have to use logic, not just listen to the words. Organizations that deal in the truth don’t employ Ministers of Propaganda. From the Bylaws of the Burning Man Project:
The clause above says “nobody can make any money off Burning Man”, which is the argument
One Who Doesn’t Know This Dude has been making. But…there’s a but. It also says “except the Founders”.
Here’s what Larry said at the BJ:
The truth is that the Burning Man Project now employs all but one of the former owners of Black Rock City LLC.
This means we have surrendered all rights of ownership.
But that wasn’t the truth. The truth is they didn’t surrender all rights of ownership. It’s there in black and white in the bylaws.
If the “sole purpose” of Decommodification LLC was to dissolve itself once the transition to a non-profit was complete, there would be no reason for this exception clause to be in the bylaws that constitute the organization. It could be covered as part of the sale agreement, or the contract that the “three year dissolution” clause is in (if that is a different document). Instead, it appears that it was extremely important for the founders to put that in the bylaws. Their right to profit from the IP cannot be taken away, ever. I can’t find any mention in the bylaws of this Dead Man’s Switch, which is strange because the bylaws describe many other situations that require unanimous consent of the directors.
Likewise, if Decommodification LLC is designed to self-destruct as soon as the org has adjusted to being a non-profit, why did they amend the ticket terms and conditions with this?
Here’s what the Org said in their 2013 Afterburn Report
More than 4 years later, and the true value of Burning Man is still in a private company, not the non-profit. So how can the “transition to a non-profit” be complete?
IP = Intellectual Property = Intangible Assets. It is the brand of Burning Man that lets them charge $1200 a ticket to create Black Rock City. It is the brand that sells out the Smithsonian with lines around the block. And it is the brand that does a licensing deal with Intel and Second Life.
This exhibit is just the start. They can take that on the road, and with so much Burner art sitting in warehouses, they can curate multiple exhibits. When a museum hosts a Burning Man exhibit, is that gifted? If Intel makes promotional videos about virtual reality there, is that gifted? Do these corporations make a donation to the Burning Man Project? Or do they pay a royalty to Decommodification, LLC? Or both?
From the 2017 Annual Report:
This feels like a new chapter in Burning Man’s history for multiple reasons. The fact that traditional arts and culture institutions are interested in curating Burning Man exhibitions is remarkable, but it’s important to note that these institutions came to us seeking a collaboration because they recognize Burning Man as an important arts and cultural movement (something we’ve all known for a long time). Not only are the work and stories produced by our culture seen as legitimate, they’re relevant, perhaps even necessary.
And it’s a healthy creative challenge to figure out how best to create a Burning Man experience for museum goers and participants outside of the great “tabula rasa” in the desert, while protecting and celebrating the things that make Burning Man so decidedly special and different. It has always been interesting to ask what the outside world finds meaningful about Burning Man, but given this new level of interest, there’s a new, more interesting question: What is it about this moment in history that makes Burning Man so relevant?
I hope that Larry’s vision as he originally explained it is realized, but that hasn’t happened yet. Instead it seems like the Burning Man experience is being packaged up for consumers in museums. Commodified.
If the year-round philosophy center at Fly Ranch gets built as it has been described to us for many years, awesome. If the road gets upgraded and local community concerns get addressed, awesome. If we can deal with the trash and environmental damage of 100,000 people, awesome. If everything owned by “Decommodification LLC” gets handed back from that private and secretive company to the registered non-profit, as was promised for 2018, awesome.
Until we see those things, the idea that “everything will be awesome!” is a LEGO kids movie. You have to consider the track record here. My opinions are formed carefully and backed with supporting evidence. Many of them have already proven true over the years. As for the ones above, I am hoping for “awesome”. Even after everything we have seen and discovered since my involvement began in the 90’s, I still hold out hope. Because Black Rock City is built by THE PEOPLE, not the fucking Org. It is the amazing artists who should be sharing in the spoils, not living year-round on the poverty line in dangerous fire trap warehouses, committing suicide in despair, etc. while a select few reap the rewards and the glory.
Larry Harvey said many times “Burning Man is a model for the future of civilization”. Synarchy is the wrong model.